Equity Versus Merit Raise
Higher "Ed" Could be Next Bubble to Burst
While Standard and Poor's downgrade of the U.S. government's credit rating has drawn much attention in the last few days, a generally overlooked report by Moody's Investment Services on the poor performance of student loans suggests higher education may be in a financial "bubble" that could burst in a stagnant economy that offers declining rewards for a college or university degree. Moody's Analytics publication for July, 2011. It notes that dollar balances on student loans have increased by double-digit rates in the past decade and the number of loans has continued to increase in recent years as more people have been seeking education and training in a declining job market. But the tightening of lending standard in other sectors of the economy that followed the financial crisis of 2008 has not affected student loans, the report found.
"Unlike other loan segments, recent student loan originations are performing worse than those originated during the lending boom," the report said. "Tighter lending standards on auto loans, credit cards and mortgages during the recession have resulted in sharply improved performance than earlier vintages, even with the unemployment rate hovering around 9%. But default rates on student loans originated since the middle of 2008 are higher than vintages originated in 2006 or 2007 at similar times in their life cycles . The worsening performance of student loans reflects the fact that student loan origination standards were not tightened as they were for other types of consumer loans."
While other forms of consumer lending are based on tangible factors like the borrower's income and credit history, student loans are "more speculative," the report notes, and are based on the expectation of incomes that will reflect and repay the investment in the borrower's education. But with the nation's unemployment rate hovering at nine percent, today's graduates are hard-pressed to find the jobs and secure the incomes they need to repay the loans.
"Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place," Moody's report said.
That has not, however, led to a decrease in the availability of loans or a change in the requirements for obtaining them. "Part of this may be because the federal government ensured that lenders had funds to lend to students throughout the recession," the report said. "With no supply constraints and a federal guarantee taking losses in the event of a default, lenders had little need to curtail their lending and every incentive to expand it. This permitted borrowing to remain robust at the cost of poorer performance.
Equity Versus Merit Raise - News
Modified gross margin for the quarter was 58.4% compared to 58.2% in the prior quarter. SG&A costs increased primarily reflecting the impact of higher sales commissions, annual merit increases and increased bad debt expense partially offset by lower
Were that to happen, the shares, at $39.65, would merit a price-earnings ratio of at least 12 we think, which translates into a $60 stock price. Even more intriguing is the possibility that a healthy bank might acquire CIT, attracted by the enormous
With housing prices declining, fewer parents can refinance or take out equity loans to pay tuition bills. In a 2009 article in Chronicles of Higher Education, Joseph Marr Cronin, former Massachusetts secretary of educational affairs and Howard E.
Thus, although the idea of a stimulus is not crazy or without merit, it does carry important risks. We really cannot be sure that it would work effectively and if it didn't, given that it would place an enormous burden on an already enormous government
The decrease in earnings was primarily due to an increase provision for impairment on foreclosed assets held for sale. The return on average equity and return on average assets for the 2011 quarter were 5.3% and 0.50% respectively, compared to 6.8% and
How to Create a Merit Raise System | Labor & Employment ...
How do you create a pay raise system that both rewards and motivates? Merit raises, rather than cost-of-living increases across the board, provide an opportunity to reward your best employees while sending a message to poor performers.
Merit raise systems (also called pay-for-performance) vary depending on the size of the company, the state of the economy, the type of job and amount of responsibility that goes with it, as well as the local wage scale of that particular job in your area. Generally, the bigger the responsibility, the larger the merit raise available for top performance.
Determining who does and does not deserve a merit raise also requires a hard look at the performance review system. Employees must have fair and measurable goals to meet so they know exactly the criteria for the raise. If your employees, for example, must produce a product, it may be relatively easy to create those goals, which can relate to productivity and quality of work. Itâs much more difficult if their jobs are less quantifiable. Nonetheless, creating clear job descriptions and annual goals that are reviewed twice a year by the employee and the manager together can help the employee know what steps to take to achieve the highest possible merit raise.
Merit pay can come in a variety of forms, from casual rewards such as movie tickets or a $50 bill, to something more elaborate. However you choose to reward employees, make sure you clearly state the reason for the reward and what they did to earn it. Itâs not enough to say âBecause youâre doing a great job.â Instead, use measurable, clear language, such as âBecause you brought in six new clients this month, meeting and exceeding the goal by two.â Announce that the rewards are available to all employees and what they need to do to earn them.
For more structured incentives in your pay system, answer the following questions:
Do you currently have annual performance reviews for all employees? How are they handled? Do you use some kind of instrument, such as a 360 review, to determine how well employees are doing? What kinds of behaviors do you value in your employees? How do you communicate that to employees? Do you have a performance management tool to use? What is your overall budget for merit raises?Equity Versus Merit Raise - Bookshelf
Merit pay, linking pay to performance in a changing world
i Making equity comparisons. even guilty. In cases of both under- and overreward , ... that they believe will not lead to as large a merit increase. Equity ...Equity theory, psychological and sociological perspectives
Extension of multidimensional equity/justice models to deal with the ... the basis of an equity rule as a "merit increase" (taking into account such factors ...Managing Human Resources
Exhibit 11.12 shows a typical merit matrix in which the raises to be given are based on performance and position in the range. Employee equity and career ...Performance measurement, management, and appraisal sourcebook
Betting the Merit Increase The second type of pay at risk ties directly to ... pay at risk is ensuring equity for intracompany transfers and new recruits. ...The Physician Manager's Handbook
You can also increase the fairness of the plan by talking with your employees to better understand the types of compensation that they desire. USING EQUITY ...Guide One Directory
Salary | Advice | Salary Talk | Merit Increase Raise
In recent years a typical raise ranged from 3 to 5 percent. Under what conditions could an employee expect a bigger raise? - Salary Talk | Merit Increase Raise
Salary | Advice | Salary Talk | Low Raise
Even if your performance meets expectations your raise may not. Factors like tenure and pay structure can affect your raise. - Salary Talk | Low Raise
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An S&GR examination of merit scores and raise percentages for a sample of about ... equity and career merit, "it's hard to make correlations between merit scores and raises. ...